The tax for the self-employed is a benefit for Russians: the main thing from the interview with the head of the Federal Tax Service

On Tax Authorities Day, the head of the Federal Tax Service, Mikhail Mishustin, in a long interview with Vedomosti, explained why the tax for the self-employed is a benefit for Russians, how the agency plans to reduce the burden on business, how data exchange helps fight offshore companies, how long the agency will increase it tax collection and what technologies tax officials will use in a few years. We chose the most important thing.

Tax pressure

The Federal Tax Service is considered one of the most effective government agencies in Russia. And the statistics cited by Mishustin prove this: over the past five years, average GDP growth was approximately 1.2%, and the growth of tax revenues exceeded it 33 times, amounting to almost 70% during this time (without inflation - 39.6%) . Mishustin avoids answering the question of how long the Ministry of Finance can continue to budget for an increase in tax collection, and instead talks a lot about the fact that the Federal Tax Service is not an enemy of business, but on the contrary:

“There is an opinion that the tax service is a strict control body. But I really want your readers to understand that this notorious pressure does not exist. Do you know the statistics of inspections of individuals? 300 inspections per year for the entire country, for 76 million able-bodied people. In 2018, we reduced the number of inspections in relation to business by another 30% - less than 11,000 for legal entities. That is, we check only two taxpayers out of 1000. For individual entrepreneurs there are even fewer - one taxpayer out of 4000, which is 0.025% of their number. There are less than 1,000 inspections across the country.”

Benefits for the self-employed

Last week, the State Duma, in the final third reading, approved a bill on a new tax regime for self-employed citizens, which from 2019 will be launched in pilot mode in four regions - Moscow, Moscow and Kaluga regions, as well as in Tatarstan. Mishustin argues that this should not be treated as a new tax, but as a “new tax benefit for citizens,” because until now they were required to pay a tax rate of 13%.

Cancel reporting for business

The head of the Federal Tax Service noted that the department is thinking about canceling two declarations for companies - for land and transport taxes. “The Tax Service itself will administer land and transport taxes, and this is one of the steps towards the abolition of tax reporting to reduce the burden on business. Just like we plan to cancel tax reporting for those who use online cash registers.” Mishustin explains these steps by competition for the taxpayer.

Fighting carousels

Carousel is a tax minimization scheme in which companies resell the same product to each other, lowering its price so that the system does not see the risk.

“Carousel schemes are known throughout the world; they are actively being fought against in Europe. It doesn’t matter if you reduce or increase the cost.” Mishustin notes that “everything will become clear” when the company applies for a deduction. According to him, online cash registers also contribute to the fight against carousels - “we will automatically identify such goods in retail.”

Cooperation with customs

“Already, almost 100% of VAT deductions related to imports are checked automatically - we receive from the Federal Customs Service data on the customs value of all goods that are imported and exported. We also exchanged risk management systems and created a new document management system. Using information from the Federal Customs Service, we added an additional 70 billion rubles.”

According to Mishustin, goods are documented to be traced as follows: “identification data of the imported cargo is entered into the invoices and transferred to the new owner upon transfer of ownership. It’s difficult to label everything, a million batches, but then the box arrived, received a number, it’s clear which store it went to, how many items from the batch were sold, and how many were left.” All movements of goods from January to summer will be visible in taxpayers’ accounting systems, notes the head of the Federal Tax Service.

Cash-out schemes

Cash-out schemes of the late 2000s are a thing of the past, notes the head of the Federal Tax Service. “But other schemes have emerged, primarily related to cash-out platforms that use completely different derivatives - for example, cryptocurrencies. We are now looking at quasi-money, special payment systems through which businesses and people try to evade taxes.”

Litigation with tax authorities

The number of legal disputes between Russians and tax authorities has decreased due to the fact that the tax authorities began to “clearly explain to business what awaits them if they go to court,” explains Mishustin. “About 20% of decisions are made in favor of business. I know that in some Western countries it is much less, there are examples where there is no more than 3%. I don’t see any strict budget position.”

Technologies of the future for tax specialists

The Federal Tax Service is considered the most technically savvy department, and this is what is always credited to Mishustin. “We are very proud that we have several important technological solutions, such as the taxpayer’s personal account. When we put it into operation, cosmonaut Pavel Vinogradov, while in space, was able to pay land tax through his personal account in about 15 minutes.”

What will tax workers use in a few years? “The first is innovative methods for collecting, storing and analyzing big data. Secondly, technologies built on the concept of the Internet of Things. The same online cash registers. Third, cognitive systems based on artificial intelligence. <...> The fourth direction is “digital identity” - technology for identifying taxpayers. Fifth is blockchain or distributed registries.”

Deoffshorization

The international exchange of tax information, launched in the fall, is working actively, Mishustin noted, both from Russian financial organizations and from foreign partners.

Business is leaving offshores, says Mishustin. “We see from tax revenues that many are moving their profit centers to Russia.” This is facilitated by the Convention on Mutual Administrative Assistance in Tax Matters, which entered into force in 2015, thanks to which offshore companies such as the British Virgin Islands, Belize, Cayman, Bermuda, etc. became transparent. Sanctions also played a certain role: “There are even residents who plan redomiciliate from Jersey to the Russian SAR [special administrative regions on the island. Oktyabrsky in Kaliningrad and Fr. Russian in Vladivostok]. This new regime makes it possible to offer businesses the same comfortable tax conditions when paying dividends as in offshore companies, but only according to our rules and transparently for us.”

Liana Faizova